An electric heat pump is a mechanism that moves heat from one place to another. It can either remove heat from a specified enclosure and discharge this heat to the outside, or it can pick up heat from the outside and discharge it into the specified enclosure, thus it operates on either the heating cycle or the cooling cycle. The same mechanism is used for both cycles, but the travel of the refrigerant is reversed in order to change from cooling to heating.
The heat transfer coil mounted inside a specified enclosure or house is usually a standard finned coil with an air blower. The remaining components, compressor, coil, and etc., are housed outside, with appropriate connecting refrigerant lines.
On the heating cycle, the heat pump compressor is powered by electricity and pumps hot refrigerant to the inside heat exchanger coil with the air blower delivering said heat inside. The outside coil is used to pick up heat and it has been known to enhance the heat pump's performance by supplying a heat source to these outside coils, such as well water, lake water or even the ground itself.
However, this does not change the fact that the heat pump compressor is still powered by electricity, the cost of which has been continuously rising over the last several years.